Published on November 26th, 2018 | by Steve Hanley0
RIP: GM Will Close 5 Assembly Plants In North America, Eliminate 15,000 Jobs, & Cease Production Of Chevy Volt
November 26th, 2018 by Steve Hanley
The mournful cry from Detroit that “Nobody wants to buy an electric car” is partially correct. Relatively few consumers want to buy a passenger car, period. As the market moves strongly toward SUVs, crossovers, and light trucks, General Motors is finding it needs to cut way back on passenger car manufacturing in North America. Today, November 26, GM announced it will cease production at 5 North American assembly plants — three of them build cars, and the other two make driveline components for passenger cars.
The plan will mean the loss of 14,700 manufacturing jobs — 6,000 in Canada and 8,700 in the US — together with a 15% reduction in its 54,000 person white collar workforce. GM started asking some 18,000 employees to consider an early retirement offer in October as the company struggled to adjust to new market realities, according to The Guardian.
According to a GM press release, the factories scheduled to be closed are:
- Oshawa Assembly in Oshawa, Ontario, Canada.
- Detroit-Hamtramck Assembly in Detroit, Michigan.
- Lordstown Assembly in Warren, Ohio.
The powertrain facilities affected are
- Baltimore Operations in White Marsh, Maryland.
- Warren Transmission Operations in Warren, Michigan.
Chevy Volt Is Dead
The company has also confirmed to Inside EVs that production of the Chevy Volt will end March 1, 2019. Is that the end of The General’s foray into building electric cars? No. The press release goes on to say, “GM has recently invested in newer, highly efficient vehicle architectures, especially in trucks, crossovers and SUVs. GM now intends to prioritize future vehicle investments in its next-generation battery-electric architectures. As the current vehicle portfolio is optimized, it is expected that more than 75 percent of GM’s global sales volume will come from five vehicle architectures by early next decade.”
Hmmm … does that sound a lot like the happy talk coming out of VW headquarters these days? “Early next decade” sounds a lot like “maybe 5 years from now.” GM could have leveraged the Voltec plug-in hybrid technology it developed for the Volt to bring plug-in hybrid minivans, SUVs, crossovers, and light-duty pickup trucks to market by now, but has preferred to pass up the opportunity.
That hasn’t stopped it from pressuring the US government to roll back fuel economy standards so it can build more Silverado and Sierra full-size pickups. Does anyone see the stunning hypocrisy behind these latest moves by GM? Mary Barra, CEO of General Motors says, “We are taking this action now while the company and the economy are strong to keep ahead of changing market conditions,” Barra said in a conference call. GM’s share price rose 5.5% on the news.
The Trump Effect
Last July, The Donald used taxpayer funds to visit Ohio, where he told people at a rally in his usual bombastic style, “I’ll tell ya what — I rode through your beautiful roads coming up from the [Youngstown Warren Regional] Airport and I was looking at some of those big, once-incredible, job-producing factories and my wife Melania said, ‘What happened?’ I said, ‘Those jobs have left Ohio.’ Then he shouted, ‘They’re all coming back. They’re all coming back. Don’t move. Don’t sell your house.'”
Today, with the news that the Lordstown factory is closing, a lot of people who believed Trump’s promises will be putting their homes on the market. It’s hard to pay a mortgage with no job. Yet people continue to believe his lies even when reality proves him wrong. According to a report by Good Jobs Nation, the outsourcing of US jobs by federal contractors rose to the highest annual level on record in Trump’s first year in office when federal contractors sent 10,269 American jobs abroad — almost triple the 3,801 in the last year of the Obama administration.
Trump told the press today he is not happy with what GM is doing. “We don’t like it,” he told reporters. “This country has done a lot for General Motors. They better get back to Ohio, and soon.” Or else what, Donald? More empty promises and lies? General Motors also said today that the tariffs on steel imposed by Donald “trade wars are easy to win” Trump have cost it $1 billion in profits so far, with more financial pain expected in the months ahead. So, thanks for that as well, Mr. President.
Can GM Survive?
GM has been experiencing declining sales in China and the US of late as customers have been finding the offerings from other companies more to their liking. It ran away from the European market last year, preferring to sell its operations there for the best obtainable price rather than deal with tightening EU emissions standards. It seems to have more interest in operating a fleet of autonomous vehicles in world cities than actually selling automobiles any more.
Is GM in a downward spiral? It’s too early to tell, but it seems mildly shell shocked by the tectonic shifts in the market that have taken place over the past few years. It went bankrupt in 2008 and got bailed out by the taxpayers. There will likely be little appetite for doing that again any time soon.
All three legacy US automakers — GM, Ford, and Chrysler — will be severely tested in coming years as they face increasing competition not only from Tesla but Chinese manufacturers as well. There is every reason to believe only one of the so-called Big Three will still be around a decade from now.
A Brilliant Idea
CleanTechnica regular reader Dan Allard has a great idea. Tesla needs a factory for its upcoming Model Y, Semi, and Roadster. Why not buy one of those shuttered factories from GM and repurpose it? After all, the Fremont factory was once part of the GM empire and buying it turned out pretty well for Tesla. The prospect of Tesla doing what GM says can’t be done with those factories would be a delicious irony. It may be unlikely, but it would be one heck of an idea and a great way to show GM the error of its ways.